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> Another factor is urbanization - there are more people living in places with high cost of living, and the childcare businesses simply have more expenses. Unl
by onlyrealcuzzo 2y ago
> Another factor is urbanization - there are more people living in places with high cost of living, and the childcare businesses simply have more expenses.
Unless those people are living outside the city and sending their kids to daycare in the city (unlikely) that would be reflected in the rent price (the denominator).
- blackeyeblitzar 2y agoI think that assumes the market can react quickly enough that everything works like some magically balancing algorithm. In practice that isn’t the case. For example if there is room for more supply of caretakers, potential caretakers need to know the demand exists, they need to be willing to relocate to those areas (which has a cost but also is a personal decision in many other ways), they need to find a good location, they need to go through permitting processes to open businesses, etc. I feel like the signals are less visible than supply and demand for housing, and the barriers are more complicated than me making a rental decision. But this is just my speculation, not a scientific take. Another aspect to consider is that both rents and business costs are changing in other ways in the background. Like for example many cities on the west coast have minimum wage laws that have been enacted in recent times, which changes the patterns of childcare costs relative to rental costs.